The Analysis Of The Intangible Assets Accountancy Influence Financial Report

As development of globe-economic integrative,intangible is the most active factor with knowledge-based economy. Intangible asset of the enterprises are increasing at a high speed, regardless of the total sum or the scale of social asset. The principles and practices of accounting which worked for centuries are encountering challenges in a world of increasingly intangible-based enterprises. Especially after the collapse of Enron and following on with WorldCom and Global Crossing, there is a strong vibration to accounting all over the world, investors and internal managements start to pay attention to relevant information in financial report .This paper identifies the economic characteristics of intangible assets, and how to identify intangible assets, and their classification. Examines the current accounting standards in the UK, US and IASC, and explains the difficulties of accounting for intangible assets. In conclusion, current accounting standards of intangible assets only recognise a small part which can be valued under transaction-based accounting. The financial reporting under those standards can not provide enough information on intangible assets for users.Some intangibles that are not included on balance sheets under current standards. R&D investments, home-grown brands, and human resources, these elements enhance the future earning power for business enterprises. It is reasonable to recognise those items on the balance sheet, and give this important information to financial statement users when they estimate business value. This is also the trend in future accounting developments.The current accounting standards emphasise providing reliable information, while ignoring the relevance of financial statements. So we suggest some possible solutions and current changes in accounting standards in this paper. The future accounting policy should be more relevant, and narrow the gap between the market value and book value of businesses.